Abstract:
In a subsistence agriculture and low income developing countries, microfinance
provision to rural areas is taken as a mechanism to reduce poverty and to empower
women economically. MFI have made important contributions to poor people
particularly to women, by providing a financial service to those who are excluded
from the formal financial sector. The study aims to assess the impact of microfinance
on women economic empowerment with a case study of Omo Microfinance Institution
in Gimbo woreda. By using multi-stage sampling method, the primary data was
collected from a total of 200 rural women of which 115 of them are non-clients of
Omo Microfinance Institution, which are used as control group. The control groups
are future clients that are very similar to clients in their overall characteristics. The
empirical analysis of this research was carried out both by descriptive statistics and
regression analysis. The regression analysis part was used propensity score matching
method of analysis. The estimated logistic regression result depict that women’s involvement in major
decision making is significantly affected by age, women’s spouse level of education,
number of family size, head of the house hold, being member of other MFI and
amount of initial wealth. Women’s level of education, marital status and ecology
were variables that are insignificant in affecting women’s economic empowerment.
The propensity score matching estimation result reveals that OMFI has significant
effect in increasing average yearly household income and personal cash saving of its
client but it is insignificant in affecting positively women’s access and ownership and
control over assets. Thus, the program intervention has been resulted a positive
impact on women’s economic empowerment in the study area. Therefore, it is
recommended that credit provision of OMFI should give priority in asset formation,
access to resources, acquire asset and able to control over it.
